UPS `Promise Engine' to Handle Inventory Issues for E-Commerce

UPS e-Logistics this spring will launch its Promise Engine, a solution that is expected to make it easier for e-commerce businesses to check inventory and fulfill orders quickly.

Tim Zach, director of marketing at UPS e-Logistics, Atlanta, said that once a customer places an order, the Promise Engine will search distribution centers to ensure merchandise availability. It also will be able to check whether an item will be available days before a customer wants it.

"If a customer places an order 10 days before he or she wants it delivered, we are building the capability such that this engine will be able to look out 10 days to ensure the inventory will be available for fulfillment," Zach said. "That's based upon current positions, inbound receipt of new merchandise from vendors, and it also takes into account new orders being placed."

UPS e-Logistics is building fulfillment centers nationwide and intends to construct additional centers worldwide, Zach said. If there are inventory or capacity constraints, UPS e-Logistics can optimize its capabilities to source orders through alternate distribution centers within its network.

"This provides our clients with the maximum flexibility to locate their inventory closest to their customer base, which means they can get products to their customers faster and [cheaper] because you're driving down transportation costs," Zach said.

UPS e-Logistics made its debut in September and is part of e-Ventures, a UPS subsidiary that was launched last year. UPS e-Logistics provides back-end fulfillment services, handles returns and provides call center and customer service capabilities for e-businesses.

The start-up cost for the service is approximately $50,000. A pay-as-you-go pricing structure is used, depending on the characteristics of a company's products. The solution is designed so that a client can have it up and running in six weeks.

"The client is paying for base utilization of our distribution centers, and they are also paying based upon the number of orders and order volumes," Zach said. He added that a typical contract is for three years.